Knockdown Home
Hello fellow investors,
I recently signed up here and was amazed with the amount of knowledge one can obtain, thank you.
My first forum posting is to request some feedback from you seasoned investors. I currently live in the NY Metro area. I have yet to make my first investment yet but found something im interested in.
A knockdown home with 19,000 square feet of land in Hicksville, NY (Nassau County, Long island) - Asking price is $349,990 neg. If no ones familiar with the property values in Long island they are one of the highest in the nation. My question would be, How can i figure out if this is a good investment to build a new constructed home with construction financing and re-sell the property for a marginal profit? What numbers should i focus on and calculate to get to that answer? Finally, how much does it typically cost to pay a builder on a new construction?
Any feedback is much appreciated.
[ Edited by Sham718 on Date 09/19/2005 ]
Sham,
I got your email but i will respond here for the benefit of all. My reply was not based on rocket science. Typically speaking, at least around here, builders will pay up to 25% of the home value for the land. By coincidence, banks around here will loan up to 25% of the home sales price to cover the cost of the land. As such, to get your retail home sales price it typically works out to be lot cost multiplied by 4= homes sales price. This figure can fluctuate slightly depending on local and unique conditions, etc. but overall the above is pretty much an accurate statement. I encourage builders/people with experience in your area to post here b/c as i previously stated, i am in the SE and there is NO national real estate market...it is all localized. Typical cost to tear a house down here after asbestos surveys, etc. is around $10-15K.
Feel free to ask any other questions and best of luck!